Dalal Street Week Ahead, June 13-17 | Stocks and Commodities

June 12, 2016
Time: 7 pm

Dalal Street Week Ahead:

1. I could not write "Pre Market Report" on 10th June as I was travelling to Bangalore.
2. Last week markets started correcting after reaching 8300.
3. The correction was mainly due to global cues.
4. Now markets all over the world are adjusting to the possible out come of "Brexit"
5. There are conflicting 'opinion poll' results regarding 'Brexit'
6. The consequence of 'Brexit' is also not clear.
7. According to a report, Europe stock markets can fall 24% if Briton exits Europe.
8. In that case, as collateral damage, many markets can fall by more than 10%.
9. So that is the biggest worry of the financial markets now.
10. On Friday the IIP data was very bad and that may drag the markets down on Monday.
11. Global cues will also support the markets to go down.
12. World markets have fallen on Thursday and Friday, both days China markets were clsoed.
13. So we need to see how China markets open tomorrow morning.
14. China will declare Industrial production data 7.30 am and that will influence the Asian markets.
15. SGX Nifty closed around 8160 on Friday, so we can expect Nifty future to open around that level tomorrow morning.
16. Our markets will be reacting to bad IIP data, bad global cues and Industrial production data from China.
17. Even last Friday Bank Nifty has out performed Nifty.
18. Since the IIP data was bad, RBI may cut rates even before next policy in August, but after Fed meet and Brexit outcome.
19. So that may keep Banking stocks out performing the Nifty.
20. Monday evening CPI inflation data will be out at 5.30 pm.
21. So markets on Tuesday will react to CPI numbers.
22. During the market hours on Tuesday, WPI inflation data will also be announced.
23. So Banking stocks will be in focus on Tuesday.
24. Particularly Yes Bank will be in focus as the FII limit has been increased in that counter.
25. Tuesday evening retail sales data is due from US.
26. On Wednesday, every one will focus on FOMC meeting out come.
27. We will react to the Fed out come on Thursday morning.
28. But generally Fed event is a non event. so markets will not react much to this event.
29. On Thursday markets all over the world will also be focusing on BOJ meeting.
30. Once Fed event is over, markets will focus on Brexit.
31. The fear of Brexit is likely to dominate the markets all over the world for next two weeks.
32. Nifty was trading between 7700 and 8000 for few weeks in the last series.
33. Only on the expiry day Nifty broke out and closed at 8070.
34. For the last two weeks Nifty has been trading between 8000 and 8300.
35. That is likely to continue until Brexit issue is over.
36. Though global cues are bad due to Brexit, we have some good local cues also.
37. First, progress of monsoon has been good.
38. Second, BJP got more seats in Rajya Sabha and Congress lost more seats. 
39. On June 14 and 15, there is a meeting of finance ministers and GST news will dominate the media from then on.
40. By end of July, GST bill may be passed.
41. Third, FIIs keep buying in both Cash and F&O markets despite bad global cues.
42. So the impact of Brexit, if that happens, will be limited in India.
43. Another reason for bad global cues is a slight fall in crude oil prices which is actually good for India.
44. So I expect Nifty to trade between 8000 and 8300 in the coming week.
45. We have a situation where we have bad global cues and good local cues.
46. Depending on which factor is going to dominate, Nifty will trade with positive or negative bias.